SFA Testifies Against Maryland Snack Tax

SFA President & CEO Jim McCarthy testified last Saturday, Nov. 3, before the Maryland House of Delegates Ways and Means Committee, expressing SFA's strong opposition to House Bill 39, a proposal to selectively tax snack foods. He was joined by the Aberdeen, MD Frito-Lay plant manager. McCarthy and SFA Vice Chairman Daryl Thomas, Senior Vice President of Sales and Marketing, Herr Foods, Inc., personally urged Maryland legislators not to pursue the bill. SFA wishes to thank members who responded to last week's request asking them to contact state lawmakers in opposition to the proposal, which would extend the state sales tax to many snack food products, including those sold in vending machines. For a Baltimore Sun column opposing the tax, click HERE.

SFA Members, please click HERE for additional information and resources. Or, contact SFA President & CEO Jim McCarthy at 703-836-4500, ext. 201.

In his testimony, McCarthy pointed out that in 1996, the Maryland Assembly eliminated the state’s original tax on snack foods, and that other jurisdictions around the country, including California, Maine and Washington, DC, have also have repealed their snack taxes. “Currently, there are no states that single out snack foods for taxation,” McCarthy said.

McCarthy told the lawmakers that snack food companies, SFA members, which sell, manufacturer products, and employ many people in Maryland, strongly oppose the proposal.

“The experiment with selective taxation of foods like snacks has been disastrous,” McCarthy said. “California, the first state to enact a snack tax in 1991, tried to devise a tax on some foods they considered snacks while leaving other similar snacks untaxed.” The result was confusion among retailers and consumers.

McCarthy also pointed out that a snack tax is regressive because it diminishes the purchasing power of lower income consumers, and is arbitrary. “Many foods that are much higher in fat, sodium and calories are left untaxed as a result,” he said. “For example, why isn’t Brie cheese or liver pate also taxed?”

Lawmakers were urged by McCarthy “to consider the negative ramifications of this kind of taxation before Maryland heads down this wrong path again.”

SFA Urges Changes in Food Safety Legislation

SFA and other food industry groups have urged Rep. John Dingell (D-MI), chairman of the House Energy and Commerce Committee, to modify food safety legislation now under consideration. In a letter to Dingell, the industry groups opposed imposition of user fees on shipments of imported food, as well as provisions that they said would undermine the Food and Drug Administration's ability to address food safety risks and place restraints on commerce without improving food safety.

While the letter stressed that the industry groups support providing FDA with increased resources, it pointed out that all Americans benefit from improvements in food safety and that the costs of FDA inspections and research should be paid from general tax revenue, not new user fees imposed on food importers. They also warned that the proposed fee “likely violates” U.S. trade agreements, invites reciprocal fees on U.S. exports, and would unfairly impact specific food products.

The industry groups also oppose provisions that would permit a private right of action against food companies and retailers, and expressed “deep concern” that other provisions, including those imposing new requirements for labeling, traceability, certification, civil penalties, process controls, quarterly inspections and steps to restrict food imports to a limited number of ports. Such action “would place enormous new burdens on FDA, food importers, and the food industry and would dramatically increase food prices without addressing the sources of contamination,” the letter said.

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Peter Ueberroth, Top Business Experts, Address SFA Executive Leadership Forum

Over 100 snack food industry leaders, including snack food manufacturers and suppliers, attended the 2006 Executive Leadership Forum, held at the Montage Resort in Laguna Beach, California.

Each year SFA brings member company Presidents and CEOs together to meet and discuss the latest issues affecting the snack food industry and hear from experts about the latest issues about business leadership. This was the 30th annual executive program, formerly known as the SFA Top Management Seminar, renamed to better reflect the purpose of the meeting.

Ueberroth, who serves on the Board of the Boys and Girls Club in Southern California, also presented SFA President & CEO Jim McCarthy and Barry Levin, Owner, Snak King Corp., who was Chair of the 2006 Executive Leadership Forum, with a contribution to the Boys and Girls Club. McCarthy is a former Board member of the Greater Washington Boys & Girls Club.

John Bridgeland, former Assistant to President George W. Bush, and now President & CEO of Civic Enterprises, a public policy firm that helps organizations, nonprofits, foundations, universities and governments develop and spearhead innovative public policies to strengthen our communities and country, discussed his experiences in the White House, including on September 11, 2001. In his work at Civic Enterprises, Bridgeland works on issues ranging from homeland security and tropical forest conservation to education and civic management.

Scott Bornstein, Knowledge Management Systems, taught attendees how they can unlock the brain’s powerhouse abilities to recall names, faces and other crucial details-both short-term and long-term memory-using Bornstein “Big 5” techniques. And Barry Glassner, author of 7 books on contemporary social issues and Professor of Sociology at the University of Southern California, discussed how America’s news, marketing strategies and politicians have fostered many of society’s misperceptions and false fears.

Finally, as part of the program there was a special SnackPAC reception. Guest was Dick Castner, Executive Director of the Western Regional Office at the US Chamber of Commence. Castner briefed SnackPAC contributors about the upcoming election and what affect the elections would have on business. SFA works closely with the U.S. Chamber of Commerce on business issues and lobbying efforts.

The Executive Leadership Committee, led by Chairman Barry Levin, developed this year’s program. For more information about the SFA Executive Leadership Forum, please contact Liz Wells at 703-836-4500 ext. 202.

SFA Day in DC Called ‘Very Valuable,’ as Members Take Concerns to Feds

SFA members who participated in SFA's Day in DC, May 16-18, 2006 had an opportunity to meet personally with top decision-makers in Washington May 16-18 and ask for their help on key issues that can affect their company’s bottom line.

“These are people who really make the policy; they are the brain trust to the President,” said Tom Howe, president, Baptista’s Bakery, Inc., Franklin, WI, after a special executive briefing by White House staff arranged by SFA for members attending the Day in DC event. “These are people who are making policy that is going to affect our business. This was a very valuable experience.”

The White House briefing by three key Presidential aides came on Thursday morning and followed Wednesday meetings with U.S. Secretary of Agriculture Mike Johanns and other top USDA officials and a series of face-to-face meetings on Capitol Hill with key Congressmen and Senators and legislative staff.

“To be able to bring people in our organization here to participate in this experience is essential,” said Mike Schena, general manager, Better Made Snack Foods, Inc., Detroit. “SFA did an outstanding job of organizing this entire event.”

For more Day in DC coverage, including a complete photo gallery, click HERE.

USDA Secretary Mike Johanns addresses the SFA members.

Convenience is King

Snack food companies are looking for ways to capitalize on the consumer’s need for convenience, even as they seek to respond to increased concern about nutrition and health, SFA President & CEO Jim McCarthy told attendees at American Wholesale Marketers Association (AWMA) REAL DEAL EXPO in Las Vegas, NV Friday, March 17. SFA was a co-sponsor of the distributors organization’s convention.

McCarthy, who traced the history of snacks from the origin of the first potato chip to today, said many products, not previously considered snacks, are now being extended by food manufacturers in order to capture snack food sales.The lines are blurring,” McCarthy said. “People are looking for something to just open and eat.” As a result, the snack food industry is seeking to find ways “to get snacking to be considered a meal occasion rather than a snacking occasion.”

At the same time, “Nutrition is key,” the SFA executive said. “It has affected the way we manufacture, market and label our products.”

"In fact, the increased emphasis on whole grains has led the industry to develop snack products—pretzels for example—that help meet the daily whole grain recommendations of the U.S. Department of Agriculture, McCarthy pointed out. “The snack industry is perfectly situated to take advantage of this. Nutrition is really driving the new categories that are coming out.”

In addition, new flavor “profiles,” such as those designed to satisfy various ethnic tastes are being developed, generating excitement and sales growth, McCarthy said.